The Nigerian Midstream and Downstream Petroleum Regulatory Authority(NMDPRA) has denied stalling operations of gas producers who have been struggling to receive payments for gas supplied to offtakers especially in the power sector.
Speaking at the stakeholder sensitisation workshop on wholesale supply operations in Nigeria, the Authority chief executive officer of the agency, Farouk Ahmed, said he has directed gas producers to halt further supply to power generation companies over non payment for gas supplied to them. The Authority was challenged with an issue raised Mr. Emmanuel Cofie-Spiff of Oando, who said only 28 per cent of entire gas supplied to offtakers has so far been received.
Cofie-Spiff said the situation has pit major finance strain on the company while the Authority has not backed producers agitation for payment.
Ahmed, who was represented by Joseph Tolorunse, lega adviser of the agency however debunked the assertion saying that when it received the complaints it directed affected companies to stop further supply until they receive payment.
Also, at the event stakeholders and the regulator were unable to reach concensus on who the responsibility it is to collect the 0.5 per cent levy on gas supply and remit such to the federal government.
Ahmed, however explained that the objective of the engagement is to address issues and concerns raised during the first phase of the NMDPRA sensitisation program, with the aim of reaching an alignment that will enable the effective implementation of the wholesale supply operations.
He recalled that the PIA came into existence in August 2021, introducing licences for wholesale supply operations as prescribed in sections 142 and 197 of the Act. These licences he said are the appropriate licences for entities engaged in, or wishing to engage in, the sale and delivery of natural gas and petroleum liquids, for domestic use or exports.
He noted that the wholesale gas and petroleum liquids supply operations marks a significant evolution from the Petroleum Act of 1969 (PA) that was focused on production and exports only, to the Petroleum Industry Act of 2021 (PIA), which ensures domestic energy security in addition to exports.
The benefits of wholesale supply operations he said cannot be over emphasised, which include fostering investments across the petroleum value chain, enhancing transparency in hydrocarbon measurement, providing tools for enforcing domestic obligations, ensuring arm’s length dealings for a level playing field, and acting as a pathway for willing buyer-willing seller transactions of Nigeria’s hydrocarbon resources, amongst many other significant advantages.
However, due to unresolved issues, he said the NMDPRA has been overwhelmed with disagreements regarding the implementation of wholesale supply operations.
